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Union Pacific Railroad reported fourth-quarter 2022 operating revenue of $6.2 billion, up 8%, and operating income of $2.4 billion, down 1% compared with fourth-quarter 2021 results.
The Class I’s net income totaled $1.6 billion, or $2.67 per diluted share, for Q4 2022, compared with $1.7 billion, or $2.66 per diluted share, a year ago.
Operating revenue growth was driven by higher fuel surcharge revenue, core pricing gains and volume growth, partially offset by a negative business mix, UP officials said in a press release.
Also in Q4 2022, UP’s business volumes, as measured by total revenue carloads, rose 1%. The railroad logged a 61% operating ratio, up from 57.4% in Q4 2021.
In terms of fourth-quarter operating performance, service and efficiency measures were affected by network congestion and winter weather. UP also reported:
• Quarterly freight car velocity was 191 daily miles per car, a 3% decline;• Quarterly locomotive productivity was 123 gross ton-miles (GTMs) per horsepower day, a 5% decline;• Average maximum train length decreased 1% to 9,191 feet;• Quarterly workforce productivity decreased 3% to 1,010 car miles per employee; and• The fuel consumption rate of 1.064, measured in gallons of fuel per thousand GTMs, improved 2%.
"In the fourth quarter, we grew carloads as we continued to face challenges hiring craft professionals in critical locations and experienced the impact of extreme winter weather on our network in December," said UP Chairman, President and CEO Lance Fritz. "As a result, revenue growth was more than offset by elevated operating expenses from operational inefficiencies and a higher inflationary environment."
For full-year 2022 compared to 2021, UP reported:
• Operating revenue of $24.9 billion rose 14%, driven by higher fuel surcharge revenue, core pricing gains and volume growth;• Business volumes, as measured by total revenue carloads, grew 2%;• The operating ratio increased to 60.1% from 57.2%; and• Operating income increased 6% to $9.9 billion.
"For the full year, we made good progress on employee safety, and we took another step toward our sustainability goals as our fuel consumption rate improved for the fourth consecutive year," said Fritz.
For 2023, UP expects continued improvements in network fluidity to support business development, generating volume growth that exceeds industrial production, he said.
"We also expect network improvements to help us recapture lost productivity while providing customers with reliable service," Fritz added.